Europe’s largest broadcaster has suggested that the worst of the advertising recession is over and there is cautious enthusiasm about prospects for growth.
RTL Group, which owns 45 television and radio stations across the continent, issued first half results on Wednesday which showed significant gains in earnings (see
Positive First Half For RTL And Five).
The upturn was attributed to strong performance in weak economies such as Germany (see RTL Cuts Losses As Results Beat Expectations), where the TV market suffered a 5.5% decline in the first six months of 2003. However with the Iraq war consigned to history and economic conditions improving, RTL sees reasons for general optimism.
“Looking ahead, we are becoming slightly more positive about the immediate future, although visibility remains limited, with second half performance likely to be in line with the first half,” said the group’s chief executive, Gerhard Zeiler. “There are signs, especially in the German market, that the bottom of the advertising recession has been reached and maybe passed.”
RTL was particularly encouraged by the performance of Five which was the only UK terrestrial channel to show audience improvement in the first six months of 2003. Moreover, the station has succeeded in driving its advertising market share up from 7.3% to 7.9% in the space of a year.
Zeiler said he expects the UK to remain flat this year, with single-digit growth to follow in 2004. A recent survey of British media companies found that there was a widespread belief that the advertising market was picking up (see UK Media Companies Upbeat On Recovery). However, there is growing competition within the industry and an increase in business will not necessarily translate into a windfall for commercial TV companies.
